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Bijural Terminology Records

Common Law

n/a

Civil Law

right of redemption

Title of the Legislative Text

Bankruptcy and Insolvency Act, R.S.C. (1985), c. B-3

Provision

2. (1) In this Act,

...

"secured creditor" means a person holding a mortgage, hypothec, pledge, charge,
lien or privilege on or against the property of the debtor or any part thereof
as security for a debt due or accruing due to him from the debtor, or a person
whose claim is based on, or secured by, a negotiable instrument held as
collateral security and on which the debtor is only indirectly or secondarily
liable;

Problem

Since the coming into force of the Civil Code of Québec, the
exercise of the rights relating to some security mechanisms is governed by the
rules applicable to the exercise of hypothecary rights. The harmonization of
the Bankruptcy and Insolvency Act with the Civil Code of Québec requires that the holders of these rights be included in the definition of "secured creditor". In order to reflect the Civil Code, only the holders of
security mechanisms governed by the rules applicable to the exercise of
hypothecary rights are listed in paragraph (b).

Solution

Paragraph (b) is added to include categories of creditors governed by
the rules relating to the exercise of hypothecary rights of the Civil Code of
Québec. These creditors include the purchasers of any property
subject to a right of redemption. Since paragraph b) refers
exclusively to the Province of Quebec, it is not necessary to refer to any
common law concept.

Harmonized Provision

2. (1) In this Act,

...

"secured creditor" means a person holding a mortgage, hypothec, pledge, charge
or lien on or against the property of the debtor or any part of that property
as security for a debt due or accruing due to the person from the debtor, or a
person whose claim is based on, or secured by, a negotiable instrument held as
collateral security and on which the debtor is only indirectly or secondarily
liable, and includes

...

(b) any of

(i) the vendor of any property sold to the debtor under a conditional or
instalment sale,

(ii) the purchaser of any property from the debtor subject to a right of
redemption, or,

(iii) the trustee of a trust constituted by the debtor to secure the
performance of an obligation,

if the exercise of the person's rights is subject to the provisions of Book Six
of the Civil Code of Québec entitled Prior Claims and Hypothecs that deal with the exercise of hypothecary rights;